Tag Archives: unemployment

Why Did Employment Increase 1.2 percent while Economic Growth Rose 7.5%?

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As the jobless recovery grinds on and on and on, a Harvard economics professor tries to puzzle out why unemployment is so awful here.

Before the Great Recession, Richard B. Freeman noted in a recent paper for the National Bureau of Economic Research, the churn in the U.S. labor market seemed to prevent a job loss from becoming long ordeal.

Back then, unemployed people had a 58 percent chance of finding work in any given month, while unemployed Germans only had a 6 percent chance. Even though layoffs were much more common in America — 3.6 percent of U.S. workers lost a job in a month, compared to one-half of one percent of Germans — it still ended up with less unemployment.

” Americans also tend to move from one job to another without any intervening spell of joblessness more frequently than workers in other countries. Connections between workers and firms in the United States have more the flavor of a dating game, with workers and firms changing partners frequently, whereas connections between workers and firms in most advanced countries have more the flavor of a stable marriage,” he wrote.

Freedman points out that if hiring was happening at the same speed as GDP growth, the country’s labor market would have already returned to normal. If it was happening even at half the speed as GDP growth, we’d be back to normal by the end of this year.

Instead, we stagnate, but Freedman has a harder time explaining why. It can’t be robots or globalization, he says, because those affect all high-wage countries.

Other economists have found “layoffs have gone from a last resort for troubled firms to accepted practice in the managers’ toolkit of profit maximizing behavior,” he writes, and says that could be why, but then why is it more the case in the U.S.?

“Perhaps the quick trigger on layoffs in the recession and slow hiring in the recovery reflects the management responses to the increased share of executive pay in stock options and stock grants and Wall Street pressures for quarterly profits. Perhaps it reflects the weaker state of unions in the United States than in other advanced countries and the unwillingness of the U.S. government to make employment policy part of the national economic strategy.”


What Not To Do On Linked In

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After you’ve been laid off, it’s great to tell people you know what happened, and ask for help. Networking with someone who used to lead the Courant is what got me in the door for this job.

E-mailing someone you don’t know and asking for help  — especially when they live in a state other than the one where you’re searching — not so useful.

Great Recession Casualty, Now Retired, Is on a Mission to Help the Unemployed

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Peter Kenny, founder of The Good Works Project, sits in his new office in Wesley United Methodist Church’s basement




In November 2008, Peter Kenny’s disaster restoration firm got caught in the undertow of AIG’s collapse , and his sales job was eliminated.

He was 64, and he had planned to work for a few more years.

“I was highly indignant,” he said. “When you’ve done a good job and end up out on the street, there’s something inherently unfair.”

With two months, he had launched a support group for the unemployed in Windsor Locks. Kenny spent 30 years as a professional headhunter, so he felt he had lots of wisdom to share with jobseekers, and he could relate to their feelings of dislocation, isolation and anger.

Nearly four years later, that support group has transferred to East Windsor, to the charming Victorian Methodist church where he’s a member, and about 175 people have attended for a time.

He hasn’t kept track of how many of those support group members have found work, but he guesses two-thirds of them.

He thinks folks who were laid off this year are getting jobs more quickly now than they did in 2009.  Bureau of Labor Statistics number support his perception — while the median length of unemployment climbed throughout 2009, 2010 and 2011, it has steadily fallen this year.

For those who were unemployed in July, August and September, half had been unemployed for 17.7 weeks or fewer. Last year, the median was 21.4 weeks. But the labor market still has a long way to go to return to normal. In Connecticut in 2007, half of the unemployed had been out of work 8.8 weeks or fewer.

Kenny said five of the support group members have gotten a job in the last few months. One woman got a job in administration in health care. Another got a job in the automotive sector. A man who used to drive a delivery truck got a job as an energy audits field supervisor. A man who had been a computer programmer got another job as a computer programmer in suburban Boston, and moved there.

When someone he’s met through volunteering with the unemployed finds work, it lifts him up.

“It justifies my existence,” he said, though he quickly added, “I can’t always take all the credit. By virtue of the fact they’re here, they might have absorbed some little tidbit.”

A sample: ” Cold calling is probably the single best job search technique.”

Jerry Zalewski, who joined the support group in early 2009, has not found a job yet, though his consultancy is busy enough that he’s earns nearly half of his old six-figure salary in industrial technical sales.

He said it’s possible he could have gotten a job in the Carolinas, but said, “At this point in our lives neither my wife nor I want to relocate.” He’s 60, and has lived in Connecticut for all but 12 years of his life.

Zalewski said while he no longer attends the support group, he’s stayed in touch with Kenny, and still refers people to that group, which is one of many in the region.

This month, Kenny has ramped up his commitment, having decided that providing tips and sympathy once a week isn’t enough.  He’s now running an employment agency of sorts, where he screens job candidates and then shops their resumes around to local businesses. So far, he’s representing four jobseekers — two former stay-at-home mothers, a manual machinist who has more advanced machining training, but no experience on those computerized machines, and a former warehouse worker with a certified nursing assistant’s certificate but no experience in that area.

“I got tired of just being another re-employment group,” Kenny said.

When he was a headhunter, he mostly worked in insurance, and, in non-recessionary times, for every 1.5 resumes he sent out, he got a bite.

“I have more credibility than somebody who’s marketing themselves,” he said.

Kenny has been working 40 hours a week on launching this placement service, which he’s calling The Good Works Project.

“I have the time. I’m retired,” he said. Why would he spend so much time on this effort when there are people at CT Works and professional staffing agencies who are paid to do it?

His first response: “Why wouldn’t I?”

His wife still works full-time.  “She sees enough of me,” he quips.

“I feel an obligation. On balance, I’ve had a happy life. I wouldn’t be here if it wasn’t for other people [helping me]. I think we all can say that.”

Because he has skills as a headhunter, he said, “There’s not everybody who can do what I can do.”

Zalewski said that belief motivates Kenny, and said he has a soft spot for him.

“The same reason we would for Don Quixote,” Zalewski said. “He’s tilting at the windmills and still believes he can win, and some of us believe he can. It’s not going to be earthshaking, but it’s going to make a contribution.”

To attend the Thursday night support group, or to see if The Good Works Project can help you or someone you know, call (860) 758-7774

Unemployment Falls to 7.8% For the Right Reasons

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One of the complexities of the monthly jobs report is that the unemployment rate can drop for several reasons (or a combination of them).

One is that people who were looking for work unsuccessfully give up. This group is called ‘discouraged workers,’ and when it’s growing, that’s a bad sign for our economy.

One is that the total number of people working drops. This can be neutral — as the elephant-in-the-python that is the Baby Boom hits retirement age, we’d expect the total number of workers to drop, unless immigration booms. Also, there’s a fairly long-time trend of fewer high school and college students working part-time while they go to school. To the extent that’s because they’re too busy with studying and extra-curriculars, not because they can’t find work, that’s also not an economic problem. But a drop in labor force participation can also be worrisome when it’s among people of prime working age, which has been happening during this bad economy.

But today’s unemployment is a drop for the best reason of all — fewer people lost their jobs and more people were hired last month.

There were 468,000 fewer people who were either laid off or had a temp job end compared to August.

And, according to the household survey (see post number one) there were 873,000 more people with jobs in September than in August.

The only fly in the ointment — besides the fact of course that 7.8 percent is still way too high — is that a lot of those new jobs are part-time when folks would prefer full-time.

The unemployment rate is now where it was when Obama took office.

There’s a lot of talk about how this news affects November’s elections, but what it says about ordinary people who have been struggling to re-establish themselves is more important.

We will find out a week from Thursday if Connecticut residents are also getting back to work. Last month’s data suggested things were worse here than in the country as a whole. But the swing was so dramatic, it could be sampling error.